Andrew,
That 'oil here' hole keeps the gasket on the plunger soft and plyable so as to make a good seal as it slides back and forth, like on a bicycle pump. Very light machine oil should be used, or sewing machine oil if you have or can find it. Use it just often enought to keep the plunger plyable 3-6 months or a 1000 shots which ever comes first.
Can remamber going on a number of 'sputzy' hunts with one of those and also getting shot in the A$$ with one in the hands of my younger brother
Bob K.